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Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Direct costs Allocate: General Factory Support Departments Human Resources $150,000 Human Resources Total after allocation. Number of employees Square footage 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Fabricating Human Resources 0 ✓ 0 X Human Resources General Factory Human Resources 0✔ ✓ 0.64 ✔ 0.65 X General Factory 0.3 X 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Producing Departments 150,000 ✓ 25,128 X General Factory $360,000 -175,128 X 60 0 Producing Departments. Fabricating $120,900 General Factory 360,000 ✔ -360,000 ✓ 0 45 0 ✓ Assembly $86,000 80 0.36 ✔ Fabricating 120,900✔ S 100,465 ✔ 63,042 ✔ 284,407 ✓ s Assembly Assembly 86,000 0 X 112,074 ✓ 435,752 X

Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Direct costs Allocate: General Factory Support Departments Human Resources $150,000 Human Resources Total after allocation. Number of employees Square footage 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Fabricating Human Resources 0 ✓ 0 X Human Resources General Factory Human Resources 0✔ ✓ 0.64 ✔ 0.65 X General Factory 0.3 X 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Producing Departments 150,000 ✓ 25,128 X General Factory $360,000 -175,128 X 60 0 Producing Departments. Fabricating $120,900 General Factory 360,000 ✔ -360,000 ✓ 0 45 0 ✓ Assembly $86,000 80 0.36 ✔ Fabricating 120,900✔ S 100,465 ✔ 63,042 ✔ 284,407 ✓ s Assembly Assembly 86,000 0 X 112,074 ✓ 435,752 X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Direct costs Allocate: Support Departments Human Resources $150,000 45 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Fabricating General Factory Human Resources. Total after allocation Human Resources 0✔ 150,000 ✓ 25,128 X General Factory $360,000 -175,128 X Human Resources General Factory 0.64 ✔ 0.65 X 0 X 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Human Resources General Factory 60 0 ✓ $ 0 General Factory Producing Departments 0 $ 360,000 Fabricating Assembly $120,900 $86,000 0 ✓ -360,000 ✓ 0 ✓ 0.36 ✔ 0.3 X 80 Fabricating Producing Departments 120,900✔ 100,465 ✓ 63,042 284,407 Assembly ✓ Assembly 86,000 ✓ 0 X 112,074 ✓ 435,752 X
Transcribed Image Text:Sequential (Step) Method of Support Department Cost Allocation Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Direct costs Normal activity: Number of employees Square footage Direct costs Allocate: Support Departments Human Resources $150,000 45 1,500 6,000 14,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Chekov Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to six significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations. Proportion of Driver Used by Fabricating General Factory Human Resources. Total after allocation Human Resources 0✔ 150,000 ✓ 25,128 X General Factory $360,000 -175,128 X Human Resources General Factory 0.64 ✔ 0.65 X 0 X 2. Using the sequential method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter"0". Round your answers to the nearest dollar. Support Departments Human Resources General Factory 60 0 ✓ $ 0 General Factory Producing Departments 0 $ 360,000 Fabricating Assembly $120,900 $86,000 0 ✓ -360,000 ✓ 0 ✓ 0.36 ✔ 0.3 X 80 Fabricating Producing Departments 120,900✔ 100,465 ✓ 63,042 284,407 Assembly ✓ Assembly 86,000 ✓ 0 X 112,074 ✓ 435,752 X
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